Welcome to M&A Minute by Finch Brands. I'm Bill Gullan, President of Finch Brands. We are a real-world brand consultancy and we help companies at key moments strengthen, clarify and activate the full potential of their brands and businesses. Today's topic is the consideration of how multiple brands are managed.
Brand management in M&A: your key to success
In the wake of an M&A activity, we are often called upon to not only assess at the master brand or the corporate level, but also to assess:
- How brands will be managed
- How many brands will continue to exist over time
- What ought to be done with brands that won't exist
- How brands can be skillfully, carefully and deliberately transitioned
We do have some philosophies though that are default viewpoints on topics like this. One of those has to do with the right number of brands existing on the backside of an M&A process and the migration.
Building a clear structure after brand migration
Put simply, this philosophy is in the direction of 'the fewest number of brands that work'. The fewest number of brands means one of the key objectives of M&A, often and particularly in the branding workstream, is efficiency. Efficiency of sales and marketing spend, efficiency of brand building investment – both financial and human.
In order to create an efficient and clear structure for brands after migration, we want to have as few as possible. But the second half of that phrase is important. The fewest number of brands that work.
What we mean by "that work" is that the right number of brands, the fewest number to effectively cover the market, the different flavors and nuances of the product offering, or of the target audience segmentation.
When a persistent theme in these discussions is we do not want to destroy equity capriciously, we always want to migrate deliberately and carefully, and that means porting over brand equity through migration.
Balancing simplicity and efficiency in brand architecture
On the back end, if you acquire a brand that is beloved and distinctive, it might make sense in that new, post-integration brand architecture world that that brand stays or continues to exist in some form or fashion.
The fewest number of brands that work is an emphatic call to balance this dichotomy between simplicity and efficiency in terms of:
- Market perception
- Internal swim lanes
- Sales and marketing investment
- Ensuring that the market is adequately covered in a way that reflects its nuances
Every prospective customer should feel like there's an offering that's a really good fit for them. They should feel that they can understand the differences in flavors or specifications between offerings. At the master brand level, the right answer for us is the fewest number of brands that work.
Product brand architecture: a different beast
Now, when you get down into product brand architecture, which we're also often working on, there are different considerations there. I think the philosophy's still true: the fewest number of brands that work.
But when you're talking about different product lines and different modules within an offering, depending on the category, it may be necessary to have multiple power brands and families across the product to meet different market segments.
Our philosophy: the fewest number of brands that work
A general guiding philosophy at Finch Brands is the fewest number of brands that work. But as noted, embedded in that is a belief that one needs to attack this with care and deliberation so that the upside, in terms of efficiency and clarity, is delivered but risk, in terms of brand equity destruction, is mitigated.
Finch Brands is a real-world brand consultancy that specializes in insights, strategy, and design, and has helped dozens of clients build successful post-M&A brands. We do this by helping clients win when it matters most by helping them own the change moment.